Pinske v. Allstate Property and Casualty Insurance Company , 44 N.E.3d 495 ( 2015 )

2015 IL App (1st) 150537No. 1-15-0537
October 27, 2015
SECOND DIVISION
IN THE
APPELLATE COURT OF ILLINOIS
FIRST DISTRICT
MARK PINSKE, on Behalf of Himself and ) Appeal from the Circuit Court
All Others Similarly Situated, ) Of Cook County.
)
Plaintiff-Appellant, )
) No. 14 CH 11443
v. )
) The Honorable
ALLSTATE PROPERTY AND CASUALTY ) Kathleen M. Pantle,
INSURANCE COMPANY, ) Judge Presiding.
)
Defendant-Appellee. )
JUSTICE NEVILLE delivered the judgment of the court, with opinion.
Presiding Justice Pierce and Justice Simon concurred in the judgment and
opinion.
OPINION
¶1 Mark Pinske, the plaintiff, filed a personal injury lawsuit against Lawrence White.
Allstate Property and Casualty Insurance Company (Allstate) defended White in the lawsuit.
The circuit court dismissed Pinske's complaint with prejudice because the parties agreed to
resolve the matter through binding arbitration.
No. 1-15-0537
¶2 Subsequently, the parties entered into a binding mediation agreement which included a
high-low agreement that limited the amount Pinske could recover. At the conclusion of the
binding mediation, the mediator, Judge Michael Hogan (Ret.), entered an award in favor of
Pinske on May 16, 2013, that triggered the maximum award, $100,000, of the high-low
agreement. Pinske requested interest on the $100,000 award on August 12, 2013. Allstate
paid the $100,000 but refused to pay interest on the award.
¶3 Pinske then filed a class action lawsuit against Allstate seeking interest on the award
pursuant to section 2-1303 of the Illinois Code of Civil Procedure (Code) (735 ILCS 5/2-
1303 (West 2012)), arguing that Allstate did not timely issue the funds at the conclusion of
the binding mediation. Allstate filed a section 2-619 motion to dismiss the complaint (735
ILCS 5/2-619(a)(9) (West 2012)), maintaining that the parties' binding mediation agreement
included a high-low agreement which settled the matter and absolved Allstate of any liability
to Pinske beyond the award entered by Judge Hogan. The circuit court granted Allstate's
motion to dismiss and Pinske timely filed this appeal.
¶4 We find that the high-low agreement the parties entered into was a settlement agreement
and that the $100,000 award was predetermined by the parties' agreement and was not
determined after an actual adjudication. Because the $100,000 was not awarded after an
actual adjudication, Allstate was not required to pay Pinske interest pursuant to section 2-
1303 of the Code. Therefore, we hold that the circuit court did not err when it granted
Allstate's section 2-619 motion to dismiss Pinske's complaint.
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¶5 BACKGROUND
¶6 On January 9, 2009, Pinske was injured in an automobile accident by a vehicle driven by
White, Allstate's insured. Pinske filed a personal injury lawsuit against White, and Allstate
paid for and controlled White's defense pursuant to White's insurance policy with Allstate.
¶7 On November 26, 2012, the circuit court entered an order dismissing Pinske's complaint
with prejudice "pursuant to the parties [sic] agreement to submit the matter to binding
arbitration." The court further ordered that it would "retain jurisdiction over the matter to
enforce the award of the arbitrator and adjudicate any liens."
¶8 Following dismissal of Pinske's complaint, the parties signed a binding mediation
agreement with ADR Systems. The mediation agreement provided that the "Honorable
Michael Hogan (Ret.) shall serve as the sole Mediator in this matter." It further provided that
"the Mediator shall decide all issues concerning liability and damages arising from the
dispute if this matter cannot be settled." (Emphasis omitted.)
¶9 Section III (F) of the mediation agreement, entitled "Award Limits," provided:
"1. The Parties may agree prior to the Mediation that a minimum and
maximum amount will serve as parameters for the Award (sometimes referred
to as a 'high/low agreement'), such that the actual amount that must be paid to
the plaintiff or claimant shall not exceed a certain amount (the 'high' or
'maximum award') and shall not be less than a certain amount (the 'low' or
'minimum award').
***
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b. All award minimum and maximum parameters are subject to
applicable set-offs if any, as governed by policy provisions if not specified in
the Agreement.
The parties agree that for this Mediation the minimum award to Mark Pinske
will be $50,000.00. Also, the maximum award to Mark Pinske will be
$100,000.00. These amounts reflect the minimum and maximum amounts of
money that Allstate insurance shall be liable to pay Mark Pinske."
¶ 10 Section IV of the mediation agreement was entitled "Effect of this Agreement" and
provided:
"A. After the commencement of the Mediation, no Party shall be permitted to
cancel this Agreement or the Mediation and the Mediator shall render a
decision that shall be in accordance with the terms set forth in this Agreement.
When the Award is rendered, the Mediation is resolved, and any Award arising
from this Mediation shall operate as a bar and complete defense to any action
or proceeding in any court or tribunal that may arise from the incident upon
which the Mediation is based.
B. The Parties further agree that any pending litigation will be dismissed, with
prejudice, as to those Parties participating in this Mediation upon the
conclusion thereof. Any and all liens, including contractual rights of
subrogation owed are subject to existing Illinois law. By agreement of the
Parties, the Mediator's Award will be final and binding and not subject to
appeal or motion for reconsideration by any Party."
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¶ 11 On March 29, 2013, the parties engaged in mediation before Judge Hogan. Judge Hogan
entered an award in the amount of $194,231 in favor of Pinske on May 16, 2013. This award
triggered the maximum award in the high-low agreement and Allstate was only required to
pay $100,000.
¶ 12 In a letter to Allstate's representative, Barbara Crawford, dated August 12, 2013, Rebecca
Trayber, one of Pinske's attorneys, requested that Allstate issue checks to a list of lienholders
and that it issue a check to Pinske with interest. Trayber noted that a "satisfaction" would be
issued to Allstate upon receipt of payment.
¶ 13 The parties agree that Allstate issued settlement checks totaling $100,000 in accordance
with the high-low agreement on August 23, 2013. On November 5, 2013, Allstate issued a
letter to Trayber, stating, "As soon as your office instructed us on check payees and amounts,
Allstate issued the $100,000. No interest is owed and will not be considered."
¶ 14 On July 11, 2014, Pinske filed a class action lawsuit seeking interest from Allstate on the
May 16, 2013 award of $100,000 pursuant to section 2-1303 of the Code. 735 ILCS 5/2-1303
(West 2012). Section 2-1303 provides:
"Interest on judgment. Judgments recovered in any court shall draw interest at
the rate of 9% per annum from the date of the judgment until satisfied or 6%
per annum when the judgment debtor is a unit of local government, as defined
in Section 1 of Article VII of the Constitution, a school district, a community
college district, or any other governmental entity. When judgment is entered
upon any award, report or verdict, interest shall be computed at the above rate,
from the time when made or rendered to the time of entering judgment upon
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No. 1-15-0537
the same, and included in the judgment. Interest shall be computed and
charged only on the unsatisfied portion of the judgment as it exists from time
to time. The judgment debtor may by tender of payment of judgment, costs and
interest accrued to the date of tender, stop the further accrual of interest on
such judgment notwithstanding the prosecution of an appeal, or other steps to
reverse, vacate or modify the judgment." 735 ILCS 5/2-1303 (West 2012).
¶ 15 On September 12, 2014, Allstate filed a section 2-619(a)(9) motion to dismiss Pinske's
class action complaint. 735 ILCS 5/2-619(a)(9) (West 2012). In support of the motion to
dismiss, Tammy Sherman, Allstate's claims service leader, averred in an affidavit that "[o]n
or about May 24, 2013, Allstate contacted Plaintiff's counsel, Rebecca Trayber, and
requested specific information regarding the names of the entities to whom the settlement
checks should be made payable and respective amounts of said checks." Sherman also
averred in her affidavit that Allstate was "ready and able" to make payment at that time, but
plaintiff's counsel required additional time to "negotiate the medical liens applicable to her
client's recovery." On October 10, 2014, Pinske responded to Allstate's section 2-619 motion
to dismiss with an affidavit from one of his attorneys, Jerome E. Boyle, who averred that
Sherman had not accurately described her involvement in the case and that a deposition of
Sherman or Barbara Crawford was necessary in order to respond to Allstate's motion. On
December 5, 2014, Allstate filed a reply in support of its section 2-619 motion to dismiss. On
January 23, 2015, the circuit court granted Allstate's motion to dismiss Pinske's complaint,
and Pinske timely filed his notice of appeal on February 17, 2015.
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¶ 16 ANALYSIS
¶ 17 A motion to dismiss under "section 2-619(a) (735 ILCS 5/2-619(a) (West 2000)) admits
the legal sufficiency of the plaintiff's claim, but asserts certain defects or defenses outside the
pleading that defeat the claim." Solaia Technology, LLC v. Specialty Publishing Co., 221 Ill.
2d 558, 579 (2006). When ruling on a motion to dismiss, the trial court must interpret all
pleadings and supporting documents in the light most favorable to the nonmoving party and
grant the motion if the plaintiff can prove no set of facts that would support a cause of action.
Rodriguez v. Sheriff's Merit Comm'n, 218 Ill. 2d 342, 349 (2006). We review an order
granting a section 2-619 motion to dismiss de novo. Solaia, 221 Ill. 2d at 579.
¶ 18 Initially, Pinske asks this court to reverse the circuit court's order that granted Allstate's
section 2-619 motion to dismiss because Allstate's motion was improper as it denied the
allegations of Pinske's complaint rather than offering some other affirmative matter outside
of the pleading that defeated Pinske's claim. Pinske raises this argument for the first time on
appeal. It is well settled in Illinois that "issues not raised in the trial court are deemed waived
and may not be raised for the first time on appeal." Haudrich v. Howmedica, Inc., 169 Ill. 2d
525, 536 (1996). We note that "waiver" and "forfeiture" are often used interchangeably,
however they have distinct meanings. "Waiver" means the "voluntary relinquishment of a
known right," and "forfeiture" means "the failure to make the timely assertion of the right."
People v. Blair, 215 Ill. 2d 427, 444 n.2 (2005). We found no evidence in the record that
Pinske intentionally relinquished or abandoned his right to raise this issue, so we find that he
failed to timely raise this issue. Blair, 215 Ill. 2d at 444 n.2. Therefore, we find that Pinske
forfeited this issue by not raising it in the circuit court.
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¶ 19 However, waiver and forfeiture rules serve as an admonition to litigants rather than a
limitation upon the jurisdiction of the reviewing court, and courts of review may sometimes
override considerations of waiver and forfeiture in order to achieve a just result and maintain
a sound and uniform body of precedent. Daley v. License Appeal Comm'n, 311 Ill. App. 3d
194, 200 (1999). Forfeiture aside, Pinske maintains that Allstate cannot rebut the allegations
in Pinske's complaint by supplementing its section 2-619 motion with an affidavit.
¶ 20 We find that section 2-619 specifically provides that an affidavit can be used to support a
section 2-619 motion:
"(a) Defendant may, within the time for pleading, file a motion for dismissal of
the action or for other appropriate relief upon any of the following grounds. If
the grounds do not appear on the face of the pleading attacked the motion shall
be supported by affidavit:
***
(c) *** If a material and genuine disputed question of fact is raised the
court may decide the motion upon the affidavits and evidence offered by the
parties ***." 735 ILCS 5/2-619(a), (c) (West 2012).
Therefore, after reviewing the Code, we hold that Allstate was permitted by section 2-619 of
the Code to support its motion to dismiss with an affidavit. 735 ILCS 5/2-619(a), (c) (West
2012).
¶ 21 Pinske next argues that although the binding mediation agreement characterizes the
proceeding as mediation, the parties actually entered into arbitration, that interest is properly
awarded on an arbitration award, and that he should receive interest on his award in this case.
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Pinske also argues that the high-low agreement the parties entered into is not a settlement
agreement, but merely a limit on the award.
¶ 22 We find that the issue before this court is whether the high-low agreement was a
settlement agreement, and if so, whether interest, pursuant to section 2-1303 of the Code
(735 ILCS 5/2-1303 (West 2012)), accrues on an award that is predetermined by a high-low
agreement. Illinois courts have recognized that high-low agreements are settlement
agreements. See Garley v. Columbia LaGrange Hospital, 377 Ill. App. 3d 678, 679-80
(2007); Madalinski v. St. Alexius Medical Center, 369 Ill. App. 3d 547, 550 (2006); Wingo v.
Rockford Memorial Hospital, 292 Ill. App. 3d 896, 912 (1997). Courts from other states
have also held that high-low agreements are settlement agreements. Cunha v. Shapiro, 837
N.Y.S. 2d 160, 163-65 (N.Y. App. Div. 2007); Thompson v. T.J. Whipple Construction Co.,
985 A.2d 221, 224 (Pa. Super. Ct. 2009) ("Pennsylvania courts have long recognized
high/low agreements as both contractual agreements and as a type of settlement.");
Employers Reinsurance Corp. v. Gordon, 209 S.W.3d 913, 917 (Tex. App. 2006) (In which
the court quoted Black's Law Dictionary and explained, "A high-low agreement is defined as
'[a] settlement in which a defendant agrees to pay the plaintiff a minimum recovery in return
for the plaintiff's agreement to accept a maximum amount regardless of the outcome of the
trial.' " (quoting Black's Law Dictionary 746 (11th ed. 2004)).
¶ 23 We find Cunha, 837 N.Y.S. 2d at 163-65, a New York case with similar facts, instructive
and persuasive. In that case, the New York Supreme Court held that a $325,000/$50,000
high-low agreement the parties entered into was a settlement. Cunha, 837 N.Y.S. 2d at 163-
65. The court reasoned:
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"A high-low agreement, when initially reached by the parties in a litigation, is,
in fact, a conditional settlement. The condition of the agreement is that the jury
render a verdict that falls outside the range of the high-low agreement. When a
verdict is rendered outside of the agreed-upon range, the condition is triggered
and the 'high' or the 'low' becomes binding upon the parties as a settlement. By
contrast, when a jury renders a verdict within the range of the high-low
agreement, the condition is not met and the high-low agreement is rendered
academic." Cunha, 837 N.Y.S. 2d at 163.
Therefore, when the jury rendered a verdict outside of the range of the "high" limit of the
agreement, the verdict was "supplanted by the parties' agreement that damages be paid in the
sum of $325,000 instead. The $325,000 award was not determined by the jurors, but rather,
by the parties themselves." Cunha, 837 N.Y.S. 2d at 164.
¶ 24 Like Cunha, the parties in the present case entered into a settlement agreement that was
triggered when Judge Hogan entered an award of $194,231 which was beyond the maximum
award or high limit of the high-low agreement. The $100,000 award was not the amount
awarded by Judge Hogan; instead, the parties' high-low agreement predetermined that
$100,000 would be the maximum award. Therefore, we find that the high-low agreement the
parties entered into was a settlement agreement. Garley, 377 Ill. App. 3d at 680; Madalinski,
369 Ill. App. 3d at 550; Cunha, 837 N.Y.S. 2d at 164.
¶ 25 Next, we must determine whether interest is paid on an award predetermined by a high-
low agreement. Section 2-1303 of the Code permits interest to accrue on a judgment that is
entered on "any award, report or verdict." 735 ILCS 5/2-1303 (West 2012). Our supreme
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court held that in order for interest to accrue, "the sum in question must be the result of an
actual adjudication *** as distinct from the parties' stipulation or settlement agreement."
Illinois State Toll Highway Authority v. Heritage Standard Bank & Trust Co., 157 Ill. 2d 282,
300-01 (1993).
¶ 26 We find that Pinske's $100,000 award was predetermined by the parties' high-low
agreement and was not an award based on an actual adjudication.
¶ 27 Therefore, we hold: (1) that the $100,000 award was predetermined by a high-low
agreement entered into by the parties so it was a settlement agreement; (2) that section 2-
1303 of the Code provides for interest to accrue on a judgment entered on an award after an
adjudication; and (3) that the $100,000 award was predetermined by the parties' high-low
agreement, and not by an actual adjudication, so Pinske is not entitled to interest on the
$100,000 award. Illinois State Toll Highway Authority, 157 Ill. 2d at 300-01. Accordingly,
the circuit court did not err when it granted Allstate's section 2-619 motion to dismiss
Pinske's complaint.
¶ 28 CONCLUSION
¶ 29 Illinois courts and courts of other states hold that high-low agreements are settlement
agreements. Garley, 377 Ill. App. 3d at 680; Madalinski, 369 Ill. App. 3d at 550; Cunha, 837
N.Y.S. 2d at 163-65; Thompson, 985 A.2d at 224; Employers Reinsurance Corp., 209
S.W.3d at 917. Interest accrues on judgments entered on awards after an actual adjudication,
but does not accrue on awards that are predetermined by high-low agreements. Illinois State
Toll Highway Authority, 157 Ill. 2d at 300-01. Therefore, because Pinske's award was
predetermined by the parties' high-low agreement, Pinske was not entitled to interest on the
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$100,000 award. 735 ILCS 5/2-1303 (West 2012); Illinois State Toll Highway Authority, 157
Ill. 2d at 300-01; Garley, 377 Ill. App. 3d at 680; Madalinski, 369 Ill. App. 3d at 550; Cunha,
837 N.Y.S. 2d at 163-65. Accordingly, we affirm the circuit court's order granting Allstate's
section 2-619 motion to dismiss Pinske's complaint.
¶ 30 Affirmed.
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